Uganda Shilling notes

The currency traded within a narrow range between the 3790 to 3830 trading levels throughout the week with pockets of activity on the supply side with last minute month end inflows balanced by some Corporate and interbank demand, Catherine Kijjagulwe, the Head of Trading at Absa Bank Uganda revealed.

The unit is likely to maintain trading within the range of Shs 3770 to Shs 3880 in the near term as activity slowly picks up in the new month. Globally, the dollar maintains its strength against most currencies.

She said Uganda said Money Markets were liquid during the week with overnight yields between the nine percent to 10.50 percent levels. Bank of Uganda was in the market with short term Repos to mop up the excess liquidity during the week. Bank of Uganda held a Treasury Bill auction during the week and yields in the 91-day, 182-day and 364-day tenors cleared at averages of 9.310%, 11.830% and 14.002% respectively. Bank of Uganda will hold a Shs 550 Billion 5-year and 20-year Treasury bond auction on Wednesday 7th September 2022.

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“The Kenya shilling continued to slide due to increased demand and limited supply keeping the unit within the 120.00 or 127.00 trading range. The Supreme Court verdict on the election petition is expected on Monday 5th September 2022,” she said.

Positive US Manufacturing PMI data at 52.8 and jobless claims data below market expectations kept the dollar strong during the week coupled with a likely rate hike by the Fed. Non-Farm Payroll data is expected.

She said the Euro remained on the back foot with the continued energy crisis and geopolitical tension between Russia and Ukraine as the dollar strengthened. It ended Thursday’s session at $0.9944 (Shs3807).

The Pound was also weak due to soaring inflation and unstable energy prices closing Thursday’s session at $1.1542 (Shs 4419).

Oil prices rose marginally as OPEC discusses output cuts with looming concern about the continued increase in covid-19 cases and lockdowns in China that are likely to impact demand. Brent Crude traded at $95.01 (Shs 363,779) a barrel and West Texas intermediate at $89.12 (Shs 341,228) a barrel. Gold traded at $1704.76 (Shs 6,527,287).

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